Tuesday, 27 November 2012

Even before today’s adverse judgement of the European Court of Justice concerning the
legality of the European Stability Mechanism Treaty under EU law, this country had already
paid over €500 million euro in October as a first instalment of Ireland’s legal obligation
under the Treaty to ‘irreversibly and unconditionally’ contribute €11 billion in various forms
of capital to the ESM Fund. Now further payments will be required.
The judgement does not bode well for the future integrity of EU treaties, the Commission and
the institutional framework of the 27-member EU that has been built up over the years and
which the ECJ is supposed to exist to uphold. The set-up that the ECJ has apparently
endorsed will inevitably move the 17 member states that use the euro down a different legal-
political path than the rest of the EU.
In his dissenting judgement in the Supreme Court, Judge Hardiman said that the ESM has
introduced a new point of reference for the exercise of Irish government power in addition to
the ‘common good of the people of Ireland’ and ‘the aims of the EU’. The new point of
reference is the interest of ‘the euro area as a whole or of its Member States’. The other side
of that equation is that the interests of members of the euro zone – especially the smaller ones
– are completely submerged under the interests of the euro zone.
For example, there is no fixed commitment by the ESM to support Ireland should its
assistance be required. The judgement is brutally frank: ‘stability support may be granted to
ESM Members which are experiencing or are threatened by severe financing problems only
when such support is indispensable to safeguard the financial stability of the euro area as a
whole and of its Member States and the grant of that support is subject to strict conditionality
appropriate to the financial assistance instrument chosen’ (Para 142).
In addition such assistance, ‘in no way implies that the ESM will assume the debts of the
recipient Member State. On the contrary, such assistance amounts to the creation of a new
debt, owed to the ESM by that recipient Member State, which remains responsible for its
commitments to its creditors in respect of its existing debts’ and any financial assistance
granted must be repaid and ‘the amount to be repaid is to include an appropriate margin’
(Para 139).
Although 27 judges heard Deputy Pringle’s application, only one judgement was delivered
and we do not know if there were any dissenting judgements. Nevertheless, we owe Deputy
Pringle a debt of gratitude for his courageous and public spirited action in undertaking this case. History will show how important it has been in re-asserting principles of democracy
accountability and the rule of law.

Even before today’s adverse judgement of the European Court of Justice concerning the
legality of the European Stability Mechanism Treaty under EU law, this country had already
paid over €500 million euro in October as a first instalment of Ireland’s legal obligation
under the Treaty to ‘irreversibly and unconditionally’ contribute €11 billion in various forms
of capital to the ESM Fund. Now further payments will be required.
The judgement does not bode well for the future integrity of EU treaties, the Commission and
the institutional framework of the 27-member EU that has been built up over the years and
which the ECJ is supposed to exist to uphold. The set-up that the ECJ has apparently
endorsed will inevitably move the 17 member states that use the euro down a different legal-
political path than the rest of the EU.
In his dissenting judgement in the Supreme Court, Judge Hardiman said that the ESM has
introduced a new point of reference for the exercise of Irish government power in addition to
the ‘common good of the people of Ireland’ and ‘the aims of the EU’. The new point of
reference is the interest of ‘the euro area as a whole or of its Member States’. The other side
of that equation is that the interests of members of the euro zone – especially the smaller ones
– are completely submerged under the interests of the euro zone.
For example, there is no fixed commitment by the ESM to support Ireland should its
assistance be required. The judgement is brutally frank: ‘stability support may be granted to
ESM Members which are experiencing or are threatened by severe financing problems only
when such support is indispensable to safeguard the financial stability of the euro area as a
whole and of its Member States and the grant of that support is subject to strict conditionality
appropriate to the financial assistance instrument chosen’ (Para 142).
In addition such assistance, ‘in no way implies that the ESM will assume the debts of the
recipient Member State. On the contrary, such assistance amounts to the creation of a new
debt, owed to the ESM by that recipient Member State, which remains responsible for its
commitments to its creditors in respect of its existing debts’ and any financial assistance
granted must be repaid and ‘the amount to be repaid is to include an appropriate margin’
(Para 139).
Although 27 judges heard Deputy Pringle’s application, only one judgement was delivered
and we do not know if there were any dissenting judgements. Nevertheless, we owe Deputy
Pringle a debt of gratitude for his courageous and public spirited action in undertaking this case. History will show how important it has been in re-asserting principles of democracy
accountability and the rule of law.